$37.4M construction loan for office-to-residential redevelopment

Introduction

Unlocking high-density urban housing financing. A private real estate investment group sought a tailored capital solution to convert an entire office complex into newly developed multifamily apartments. Cornovus Capital arranged a $37.4 million non-recourse construction loan through a national debt fund to support the project’s adaptive reuse conversion. The financing structure provided maximum leverage, structured reserves, and Mini-Perm stability upon completion.

Executing this transformation required sophisticated financing strategy for acquisition, construction, public lease-up staging, and long-term stabilization.

Challenge

Structuring a complex capital stack for adaptive reuse. The borrower faced several critical challenges in executing the large-scale redevelopment:

Structural & Zoning Adaptation – Converting commercial office space into residential units required major structural modifications, zoning approvals, and infrastructure modernization to meet building codes and market demands.
TIF (Tax Increment Financing) Integration – The project secured TIF funding from a local economic development authority under the Ohio Tax Increment Financing Program to offset infrastructure and improvement costs.
Capital Structuring & Risk Mitigation – Aligning TIF disbursement schedules with private capital sources required expert coordination between lenders, municipal agencies, and development stakeholders.
Market Positioning & Lease-Up Strategy – Financing needed to support lease-up efforts, absorption risk, and stabilization before permanent refinancing.
Exit Strategy & Long-Term Investment Stability – Borrower required a capital structure that ensured financial flexibility post-construction, allowing for a seamless Mini-Perm transition or permanent takeout upon stabilization.

Solution

Customized structuring of a $37.4 million non-recourse construction loan. To meet the project’s capital needs, Cornovus Capital and the selected debt fund lender structured a loan package designed to maximize flexibility and leverage.

Loan Amount: $37.4 million
Loan Type: Non-recourse construction financing with debt fund execution
Interest Term: Competitive market rate with a built-in Mini-Perm transition
Leverage Optimization: High loan-to-cost ratio maximizing borrower equity retention
Reserves & Capital Allocation: Structured reserves for tenant improvements, leasing commissions, and operating expenses
Capital Stack: Integrated TIF funding to optimize overall financing efficiency
Exit Strategy: Optional refinance or sale post-stabilization aligned with long-term investment horizon

Results

Transforming office real estate into competitive multifamily housing.

Efficient Financing Execution – Delivered fully structured construction financing with strong lender coordination and timely draw management.
Multifamily Market Expansion – 146 newly converted apartments within repurposed office structures.
Stabilization and Refinancing Ready – The Mini-Perm transition created bridge stability prior to permanent refinancing.
Market Repositioning – Redeveloped asset repositioned into a high-value residential community with Class A amenities.

About Cornovus Capital

With over 70 years of combined experience, Cornovus Capital is a trusted financial partner specializing in business financing, commercial real estate lending, and adaptive reuse construction financing. We design customized capital strategies that help investors and developers acquire, expand, and reposition assets, ensuring long-term growth and financial stability.

Our expertise spans non-recourse construction financing, CMBS and LifeCo debt placements, bridge and transitional capital, and structured debt strategies. By focusing on certainty of execution and lender alignment, we guide developers and investors through complex capital markets transactions with confidence and precision.

Why Partner with Cornovus Capital?

At Cornovus Capital, we understand that large-scale development and adaptive reuse projects require sophisticated structuring and hands-on execution. Whether repositioning office assets, pursuing ground-up construction, or integrating municipal incentives, we deliver capital strategies engineered for speed, certainty, and alignment.

What Sets Us Apart

Advisory expertise in adaptive reuse, mixed-use, and high-density redevelopment
Access to national and regional debt funds, institutional capital, and alternative lenders
Proven ability to integrate TIF, tax credit, and private capital layers for large-scale projects
End-to-end advisory and execution support from pre-development through stabilization

Contact Cornovus Capital

For developers and investors seeking non-recourse construction or redevelopment financing, Cornovus Capital delivers expertise, efficiency, and certainty. Our advisory approach ensures projects are capitalized strategically for long-term success.

Email: info@cornovuscapital.com
Phone: 513-993-3044
Website: cornovuscapital.com